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Comstar-UTS Presentation at UBS 2007 Annual Investment Conference Moscow, Russia

Comstar-UTS Presentation at UBS 2007 Annual Investment Conference Moscow, Russia. November 15, 2007. Combined Telecom Operator. Comstar-UTS. Sister companies. CLECs in Moscow and regions 0.6 mln active lines in Moscow 0.9 million subscribers outside Moscow

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Comstar-UTS Presentation at UBS 2007 Annual Investment Conference Moscow, Russia

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  1. Comstar-UTSPresentation at UBS 2007 Annual Investment Conference Moscow, Russia November 15, 2007

  2. Combined Telecom Operator Comstar-UTS Sister companies CLECs in Moscow and regions 0.6 mln active lines in Moscow 0.9 million subscribers outside Moscow Multi-service solutions to corporate& developers STATE HOLDING Comstar owns 25%+1 share 7 ILECs, Rostelecom, Central Telegraph 32 million installed lines covering 90% of Russia ILEC in Moscow 3.6 million residential subscribers More than 90% of lines are ADSL compatible CLEC in Moscow #1 broadband provider 33% market share 0.4 million residentialsubscribers MOBILE OPERATOR Cooperation with Comstar: joint use of network infrastructure, convergent projects, joint sales efforts ILD/DLD OPERATOR Cooperation with Comstar: DLD/ILD services to Comstar clients

  3. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Value drivers • Simplifying Organizational Structure • Unlocking Operational Potential • Increasing Broadband Market Share & ARPU • Selective Modernisation of the “Last Mile” • Regulated tariff rebalancing • Cost optimization • Increase in efficiency • Driving Regional Expansion • Capitalising on Svyazinvest stake as a financial investment and through participation in privatization

  4. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Simplifying Organizational Structure Now Objective Free float 35% • Elimination of cross ownership between MGTS and Comstar • Integration of Comstar Direct • Turning regional subsidiaries into affiliates Regional branches 51% 48% 56% 14% 52% 17.3% 23% 21% 7.7% Other

  5. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Unlocking Operational Potential Lines / Employees • Management by processes • Comstar focus: • Strategy • Regions (M&A, Greenfield) • SvyazInvest • MGTS focus : • Network modernization & maintenance • Mass market sales • Comstar – Direct focus: • High-value broadband sales • Outsourcing of non-core functions • Potential for Significant headcount reduction Source: Analysts reports

  6. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Increasing Broadband Market Share • Objective of >50% market share in Moscow by 2011 from current 33%* • Revised broadband strategy • Direct sales using MGTS technicians and brand • Unique Post-paid tariffs, One Bill for all telecom services for residentials • Selective Modernization of the “Last Mile” • Fiber to the Curb (FTTC)- started Sep. ’07 • CAPEX of up to $100 million • 70-80% of the “last mile” is to be “Speed Up” to 20-25 Mbps by 2010 Moscow Residential BB Market, 2Q’07 426 thousand subs Total: 1.3 mn subs Source: Company data, Direct INFO, Pyramid Research. Penetration calculated as % of households, 1H2007

  7. Modernization of the “Last mile” STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST 35 000 apartment blocks 1. Fiber to the curb Services 2. Moving DSLAM closer to the customer- to the curb Speed 1 Gbps 3. Selective installation of fiber to the home Apartment • HDTV • Internet (100+ Mbps) • Smart home • Video monitoring • etc Fiber Set- top-box 250 switching centers Modem 20-25 Mbps Box • HDTV (2-3 TV sets) • Internet (10-20 Mbps) ~300 м. 6 Mbps Copper Copper DSLAM Curb Curb Fiber Fiber • IPTV (1 TV set) • Internet (up to 2 Mbps) 11 000 curbs ~1,5 кмbackbone 7

  8. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Regulated tariff rebalancing Growth in Regulated Tariffs (US$) Residential Subscriber Mix

  9. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Driving Regional Expansion - Comstar presence (Current) - Comstar target (Future) Russian Fixed Line Market (2007E) - $17,8BN 100% Strategy $4,4BN 3 DLD/ILD/Transit 80% • Increasing market share in the regions of presence • Expansion into the target regions • Entering the DLD/ILD segment $1,3BN 60% ILEC $1,3BN $1,6BN ILEC $2,3BN 40% ILEC $1,2BN ILEC $1,2BN $3,4BN 20% 1 2 CLEC CLEC CLEC $1BN CLEC 0% Moscow Regions of presence Target regions Other regions *Source: Сomstar-UTS estimates • Tyumen • Saratov • Volga • South • Saint Petersburg • South • Volga • Ural • Siberia 9

  10. STRUCTURE BROADBAND MGTS REGIONS SVYAZINVEST Capitalizing on Svyazinvest Investment Russian regional market, US$, 2006 • 25% +1 share acquired for US$ 1.3 billion in December 2006 • Call (by December 2007) and put (2 year) option agreement with Seller for 11% of Comstar shares currently held by MGTS Finance • 2 seats on the Board of Directors • Successful financial investment • Upside option as Strategic Player in privatization process * Including Rostelecom 16%

  11. The Unique Investment Opportunity USD 1.92 billion USD 5.36 billion USD 5.18 billion USD 3.66 billion USD 5.17 billion USD 3.93 billion USD 3.26 billion EV/EBITDA 2007 8.8x EV/EBITDA 2007 6.0x EV/EBITDA 200716.5x EV/EBITDA 2007 8.5x Valuation at Altnet Multiples Comstar Market Cap ex Svyazinvest Valuation at ILEC Multiples Valuation at Broadband Multiples Comstar Market Cap Comstar EV 21.6% of Svyazinvest ¹Source: Consensus (Morgan Stanley, URALSIB, Goldman Sachs, Deutsche UFG, Troika Dialog, Aton Capital, Alfa Bank, ING, Renaissance Capital, UBS, Merrill Lynch, Veles capital, Credit Suisse, FIM, MDM Bank, JPMorgan). All data as at 29 October 2007 11

  12. Contacts For additional information please visit www.comstar-uts.com or contact Masha Eliseeva Head of Investor Relations Phone: +7 985 997 08 52 E-mail:ir@comstar-uts.ru

  13. Appendix

  14. Combining Growth & Profitability Source: Company reports

  15. Income Statement Half Year Highlights • 32% year on year revenue growth • 42.9% OIBDA margin • US$ 14.5 million change in fair value of call and put option

  16. Segmental Breakdown * Excluding US$ 62.1 million Stock Bonus Awards

  17. Cash Flow Statement

  18. Balance Sheet Half Year Highlights • US$ 675 million 6 month loan facility arranged in December 2006 with ABN AMRO Bank N.V. • Refinanced in June 2007 with 5 year RUR 26billion credit facility from Sberbank • Total debt of US$ 823.5 million • Net debt of US$ 675.3 million

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